U.S. stocks erase losses as technology, energy shares rebound

U.S. stocks erased losses as technology and energy shares rebounded from earlier declines sparked by data showing U.S. economy grew less than economists forecast.

Sixteen S&P 500 companies posted quarterly earnings today. Of the 270 that have released results so far this reporting season, 74% have exceeded analysts’ predictions, data compiled by Bloomberg show. Analysts are turning more bullish on corporate earnings. Profit at S&P 500 companies gained 1.1% in the first three months of the year, according to analysts’ projections compiled by Bloomberg. That compares with last week’s projection for a decline of 1.1%.

Volatility Index

The Chicago Board Options Exchange Volatility Index, or VIX, fell 0.8% to 13.51. The CBOE opened for trading three-and-a-half hours late yesterday after a problem with its computer systems shut the derivatives market. The equity volatility gauge is down 25% for the year.

Technology stocks erased an earlier decline of as much as 0.4%. Hewlett-Packard Co. rallied the most in the Dow, adding 2.5% to $20.07. Apple Inc. added 2.3% to $417.84.

J.C. Penney surged 14% for the biggest gain in the S&P 500 to $17.34. Soros Fund Management LLC’s stake is equal to 7.9% of J.C. Penney, according to a filing yesterday. The investment makes the billionaire the fourth-largest shareholder, according to data compiled by Bloomberg.

Chevron Rises

Energy stocks rebounded as Chevron Corp. gained 1.5% to $120.32. The world’s third-biggest energy company by market value reported first-quarter profit that exceeded analysts’ estimates after boosting natural gas output amid rising prices for the fuel.

The S&P Supercomposite Homebuilding Index rose for the sixth straight day, adding 3.2%. The measure of 11 homebuilders is at the highest level since March 21.

D.R. Horton Inc. increased 8.7% to $26.66, the highest since February 2007. The largest U.S. homebuilder by volume said its fiscal second-quarter profit more than doubled as demand for new houses climbed in a recovering market.

Raw-materials producers fell the most out of 10 S&P 500 groups, losing 1.2%. Alcoa Inc. slumped 0.8% to $8.32. The largest aluminum producer in the U.S. had its credit rating outlook revised to negative by S&P Ratings Service after a slump in the price of the metal. DuPont Co. erased 0.5% to $53.02.

Amazon, Starbucks

Amazon dropped 6.5% to $256.82 as the world’s largest online retailer forecast a range between an operating loss of $340 million and a profit of $10 million for the second quarter. Analysts on average project a profit of $165.1 million. The maker of Kindle tablets said late yesterday first-quarter net income fell 37% to $82 million, or 18 cents a share.

Starbucks slid 0.5% to $60.19 as the world’s biggest coffee-shop operator posted fiscal second-quarter revenue of $3.56 billion, missing the $3.58 billion median estimate of analysts in a Bloomberg survey.

“Europe continues to be just a challenging place for us -- it’s a very, very difficult macro environment there,” said Chief Financial Officer Troy Alstead.

Expedia declined 9.5% to $58.77 as Chief Financial Officer Mark Okerstrom lowered his 2013 forecast for so-called organic earnings before interest, taxes, depreciation and amortization by $20 million to $30 million, citing increased competition facing its Hotwire discount-travel website.

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